back to article Arm China CEO refuses to go despite SoftBank taking control

The Arm saga is continuing with the ousted CEO of Arm's renegade Chinese division still refusing to step down, despite being fired again recently. Both SoftBank and Arm were last week seeking an agreement that would allow them to regain control of Arm China, the chip designer's subsidiary in the Middle Kingdom. SoftBank has …

  1. VoiceOfTruth

    B b b Boris

    -> Johnson has written to SoftBank executives as part of a last-ditch effort to convince them to change their minds over where Arm should be listed for its initial public offering

    Imagine Boris Johnson trying to convince anyone of anything. Frizbee.

    1. Doctor Syntax Silver badge

      Re: B b b Boris

      I'm sure he manages to convince himself of anything, sometimes for hours at a time, until he needs to convince himself of the opposite. He probably thinks that works on other people as well.

    2. iron Silver badge

      Re: B b b Boris

      I wouldn't underestimate BJ's powers of persuasion, he seems to be very capable of persuading women to drop their knickers.

      1. NoneSuch Silver badge
        Pint

        Re: B b b Boris

        Any man who must say ‘I am the King’ is no true King.

        – Tywin Lannister

      2. Youngone Silver badge

        Re: B b b Boris

        Boris also persuaded the English to give the Tories a fairly large Parliamentary majority, despite them being well aware what a mendacious scumbag he is, and how corrupt his Tory colleagues are.

        That took some doing.

        1. werdsmith Silver badge

          Re: B b b Boris

          Any Boris success in the elections is largely due to the totally dire alternatives that were offered rather than any particular confidence in him.

          The electorate decided that if they are going to have to select from a choice of cretins then they might as well have some comedy out of it.

          1. Alan Brown Silver badge

            Re: B b b Boris

            Or, what the right wing press convinced the electorate was the dire alternative

            Say what you like about Murdoch, he's picked and backed the prime minister correctly before each election for the last 40 years

            (which might be a pointer to what the real problem is....)

    3. StrangerHereMyself Bronze badge

      Re: B b b Boris

      Yeah, but Boris is still running the country. So all your lamenting doesn't mean sh*te.

    4. Alan Brown Silver badge

      Re: B b b Boris

      He's good at convincing the gullible and those already "who want to believe"

      the problem with having a Barnum as Prime Monster is that you have a Barnum as Prime Monster - and this one isn't content with mere entertainment

  2. pimppetgaeghsr

    ARM is the new IBM, more known for it's previous standing in the world and innovations in a long forgotten decade. It's legacy will be an ISA that they don't even implement anymore before long.

    It seems all major customers are seeking to move to their own implementations which may help royalities, but that doesn't justify engineering teams with ever growing salaries. Once that happens it will only be a matter of time before those companies jump to something like RISC-V.

    1. Anonymous Coward
      Anonymous Coward

      Do you only come here to post nonsense about ARM, or is there any other trolling you want to get off your chest?

      1. Throatwarbler Mangrove Silver badge
        Holmes

        Based on its posting history, it also dislikes Google.

      2. pimppetgaeghsr

        Is there anything wrong with what I said?

        The companies designs are getting destroyed in the microcontroller space, their A class CPUs will be replaced soon by Qualcomm/Nuvia and they are barely making a dent in the server space.

        1. werdsmith Silver badge

          Is there anything wrong with what I said?

          If you were trying to come across as a pub-bore then no, perfect execution.

      3. Alan Brown Silver badge

        It has a point though. ARM is losing momentum and the Nvidia grab attempt has convinced a lot of players to look for other options

  3. confused and dazed

    too late

    Shame the UK Tory party were not more interested before Softbank bought them ...

  4. Peter2 Silver badge

    So, Softbank bought Arm in 2016 for ~twenty years worth of ARM's yearly revenue and ~64 times their yearly profits, presumably hoping to shove up the licensing fees to make up for this, however when they tried to quadruple the license fees people started looking at switching to other things (eg RISC-V) and Softbank realised that they'd fucked up.

    So to improve matters, they sold a majority stake in ARM China to entities controlled by the Chinese Communist Party in 2018.

    They are then surprised that the above has rather different objectives to Softbank, and that the China operation is now operating for the benefit of China rather than the ARM board. They then fail to sell ARM to NVIDIA, and are going to sell shares publicly, where they will likely discover a discrepancy between what Softbank wants ARM to be worth vs the actual likely value.

    The real tragedy is that these sort of managers are now banned from providing management consulting to Russia so they'll end up advising companies in the UK instead.

    1. Anonymous Coward
      Anonymous Coward

      Not quite.

      To do business in China (as with lots of Asia) the company has to be majority Chinese owned. So typically they are a subsidiary with limited investment, owned by friendlies. This company was a marketing company for ARM in China, basically a few marketing men in an office.

      China (the board members connected to the Chinese government) have ejected him. This is not a Chinese takeover of ARM, its a rogue employee.

      After he was sacked, all the revenue he hijacked is theft. Any money he's taken from the company is theft.

      Likewise any contracts he signed on behalf of the company are voided, the seal works only for China, and those companies sell their products abroad. He is not authorized to sell those licenses.

      Presumably he realizes that as soon as he hands over the seal, he faces some major legal problems, and likely jail time.

      So I assume he's trying to force a settlement in his favor by furthering this crap. But it won't work. He's done too much damage here I don't think the Chinese board can simply ignore what he's done.

      I think at this point, it has to go to court, and they (the Chinese) have to make an example of him.

      There's no sense in which a company's manager can seize ownership of the company by stealing the company seal and helping himself to company funds. It's not his company, those are not his funds, and he is in defiance of the Board (which includes a lot of high ranking Chinese officials he's defying).

      It's a criminal matter at this point. No longer civil.

  5. Pascal Monett Silver badge
    FAIL

    "kept physical possession of the Arm China's official seal and registration documents"

    This, in itself, is a gigantic red light as to why Western companies should not have commercial dealings with China.

    If it is my company, then I should be able to fire whomever I please, but no, not in China. China forces you to have one of their nationals at the head of the company, and if that guy doesn't want to step down, you're screwed.

    Well that in itself tells me that I would never want to have a subsidiary in China. You can't trust it.

    1. Youngone Silver badge

      Re: "kept physical possession of the Arm China's official seal and registration documents"

      That has been China's policy since the 1990's when they decided to start taking the West's money in an effort to modernise their economy.

      The greedy capitalists of the West fell over themselves in an effort to exploit a new, cheap source of labour and a potential new consumer market.

      It is way too late to start complaining, the rules were spelled out quite clearly.

    2. BOFH in Training Bronze badge

      Re: "kept physical possession of the Arm China's official seal and registration documents"

      And the fact that this issue has dragged on for years, at a high profile company, shows the whole world how such China subsidiaries can work.

      Even if they make an example of that ex boss, it still took so long to get anything done.

      In the future, even if I run a company, and am tempted to open something in China, I will have to think twice or thrice. And if forced to (due to shareholders, etc), I will give it very limited resources, access to IP and authority. So any similar screw up, I can dump that operation and tell whoever pushed me into it "told you so".

      1. Anonymous Coward
        Anonymous Coward

        Re: "kept physical possession of the Arm China's official seal and registration documents"

        In the future, even if I run a company, and am tempted to open something in China, I will have to think twice or thrice.

        Nah. You start with running it from Singapore, and you only run a subsidiary in China.

        That you can't trust certain layers of the bureaucracy there doesn't mean you can't do business there and even get a decent standard of quality. Ask all the hardware producers who have their business there, it's a matter of structure and managing the by now fairly well known risks.

        1. Anonymous Coward
          Anonymous Coward

          Re: "kept physical possession of the Arm China's official seal and registration documents"

          Yes, let's ask those companies about the quality of product they've seen. Don't be surprised if the answer is "What product? They stopped shipping."

    3. Alan Brown Silver badge

      Re: "kept physical possession of the Arm China's official seal and registration documents"

      The board is also Chinese. They're playing by the rules in the face of a rogue employee

      Such things have happened in western companies and usually gone to court a lot more quickly

  6. DS999 Silver badge

    So just IPO without the Chinese subsidiary

    Cut off their access to any of ARM's IP, so while they may have copies of everything up to a certain date it will eventually fall further and further behind the worldwide ARM, and be less and less relevant.

    Probably time for Softbank to write off its investment in this subsidiary, without the ability to enforce its will and Chinese courts almost certain to side with ARM China, they don't have much choice.

    1. tomgid

      Re: So just IPO without the Chinese subsidiary

      According to a report published on yesterday, looks like SB/ARM already conceded additional chunk of ARM China to the Chinese investors in exchange for agreeing to ousting of Wu, which translates to virtually zero prospect of the Chinese venture getting included in the expected IPO...

      Also, it turns out Wu himself has had a quite legitimate say for awhile, as he himself has built more than a 16 percent stake in the JV.

      ARM has been totally wrecked since the delisting/acquisition and meanwhile the UK gov didn't even bother to take a look at "the most successful tech company of the land". Shame, shame.

      Source :https://www.scmp.com/tech/big-tech/article/3176645/softbank-wins-key-corporate-battle-china-ousting-defiant-ceo-arm

  7. tomgid

    Company Destroyed

    So it seems ARM's Chinese business is gone and so is at least a quarter of ARM's annual revenue. Adding insult to injury, the Chinese arm is already making a move to become a formidable rival to ARM in the region, by having been actively developing their own IPs, if you consider a lot of Asian electronics manufacturers depend on the Chinese market for their living. The Chinese will def use their homegrown design if it's akin enough to replace the original.

    The only solution left to this mess right now is to nationalise ARM to deter further damage to the company, which is crucial to the semi industry of UK and the World. The Gov has to step in and take actions just like it had BP pull back from its Russian business. Enough is enough.

    1. pimppetgaeghsr

      Re: Company Destroyed

      Boris and the other foreign agents running the country will simply sell it off once some of their uni pals get into the senior positions within the company and get some of that equity.

    2. Alan Brown Silver badge

      Re: Company Destroyed

      Nationalising ARM would result in capital and intellectual flight like never seen before. It's not like nationalising the railways or P&O

    3. This post has been deleted by its author

  8. Anonymous Coward
    Anonymous Coward

    I wonder whether more high tech companies will wind down operations R&D in China or remove IP as a result of this.

    I worked at a large valley company that removed all their R&D from China about 5 years ago. It went primarily went to India and Romania.

    1. Alan Brown Silver badge

      Romania is turning into an absolute star in this brave new world - I'm constantly dealing with tech support from there and they're almost always brilliant and well educated on what they're supporting

      Unlike India....

  9. StrangerHereMyself Bronze badge

    Black Hand

    So basically the Black Hand of the CCP is behind all this.

    In any civilized Western nation they'd have simply have called the police to apprehend the CEO for trespassing. Him refusing to go means he's either being guided by the CCP or knows he has the backing of the authorities.

    1. Alan Brown Silver badge

      Re: Black Hand

      Or the CCP don't want to be seen as heavy-handed, thereby scaring off foriegn investment. "Better to let this play out through the legal channels"

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